There was a time when the annual meetings of famous global institutions (some may call them clubs) were held in beautiful and exotic locations, perfect for a nice holiday, away from work. None of these summits, one can be assured, produced many (if any) tangible outcomes other than a relaxing vacation for world leaders. The locations have now changed to places which are best suited to provide security from sundry protestors (think Doha and Singapore), but the content and outcomes of global summits remain the same?-a big zero. It is not surprising then that the G8 summit in Tokayo, Japan, achieved very little even in this time of global economic crisis.
It would be unfair, though, to single out the G8. It deserves criticism for being too exclusive?it excludes the two largest countries in the world (India and China) and has no representation from Africa or Latin America. It has even diluted its democratic credentials by including an authoritarian Russia. Under the circumstances, there is not much the group can solve for the world?given the intense rivalry between the eight, it is unlikely to achieve any coordinated solutions for its own membership. Still, other international institutions are as bad and ineffective, if not worse.
The United Nations, perhaps the largest of all global clubs, is the finest example of what an international institution should not be like?-undemocratic because of an exclusive right to veto accorded to a privileged-5, unresponsive to global problems, outdated in its mandate and containing an unnecessarily bloated, inept, entrenched and very expensive bureaucracy. Part of the problem is the inevitable inertia that overcomes such large organisations?the UN was founded in the aftermath of World War II to prevent wars between nations. It hasn?t adapted enough to the new realities of terrorism and civil war as the dominant forms of conflict in the twenty-first century. The P-5 must take much of the blame for having consistently blocked all sensible UN actions and for blocking UN reforms.
The World Bank and IMF, formed at the same time as the UN, also find themselves falling behind the times. The International Bank for Reconstruction & Development (aka World Bank) was set up to rebuild the war torn economies of Europe. The IMF was set up to the manage exchange rates for the same set of economies. Both the institutions lost their raison d?etre in the 1970s as the western economies moved on. Like all good bureaucracies, both the Bretton Woods sisters, taking a leaf out of Say?s law?supply creates its own demand?found themselves something else to do. Developing countries were now to be the focus. This is not the space to deliberate whether the policies they recommended were good for developing countries?that is long, complicated and controversial. Suffice to say, that any policy they recommended was jaundiced by the governance structure of the organisations?developed countries have most of the voting share and the US has an effective veto. Developing countries, then, could be forgiven for viewing every move of the World Bank and IMF suspiciously. The governance structure should surely have changed with the new focus on developing countries in the 1970s?even today the same matter remains under discussion. The major shareholders are unwilling to even part with a top leadership role to someone from outside the US or EU.
The developing countries, amidst all this bias, have tended to coalesce around their own clubs, the G77 for example. Unfortunately, these south-south clubs have been as ineffective as any other. The ?south? isn?t a homogenous unit?developing countries come with different sizes, strengths, problems and interests.
So is international cooperation doomed to failure? It may yet be, but the world can?t reach that conclusion so easily. There are many problems that need to be solved at a global-multilateral level. Climate change, barriers to economic activity, and conflict remain issues which need global agreements. Some of these issues could admittedly be solved bilaterally or even regionally and that process should continue. However, bilateral/regional negotiations give very limited leverage to smaller, less powerful countries compared with their bigger, richer counterparts. Thus, there still is a strong case for an all inclusive, democratic and transparent international institution. A revamped United Nations, with a slimmer bureaucracy, its own army and without vetoes could be something to consider. This isn?t the best time to be marketing the WTO, but it is perhaps the only international organisation which has some legitimacy, largely due to its one-country-one-vote principle guiding all negotiations and outcomes. In the view of this author, complex, protracted negotiations are not always a bad thing, if the ultimate outcome is in the form of a positive gain for all. Don?t give up on the WTO just yet.
It goes without saying that all this reform needs a lot of political will. The imminent change of government in the US lends some hope?both the major candidates are internationalist to a degree. It is not enough to simply expect the US and other rich countries to change track?countries like India and China also have a crucial role to play in any revision of the architecture of global governance. They must not abdicate responsibility.
?dhiraj.nayyar@expressindia.com